U.S. CFTC Approves Gemini's Prediction Market Operation…Also Considering Expansion Into Virtual Asset Derivatives

The U.S. Commodity Futures Trading Commission (CFTC) has approved a designated contract market (DCM) license for Gemini to operate a prediction market. Gemini is considering expanding the business to include a derivatives market based on virtual assets (cryptocurrencies).

According to The Block on the 10th (local time), Gemini said it plans to first launch binary event contracts in a yes/no format through its new platform, Gemini Titan. The company explained that, if necessary, it could expand the scope to CFTC-supervised virtual asset futures and options and perpetual futures (perps) markets.

Gemini first applied for the DCM license on March 10, 2020. At the application stage, whether it would operate a prediction market was not clearly revealed, and designated contract markets are a common registration type that covers most CFTC-registered trading facilities. The company said this approval has laid the groundwork for future business expansion.

The U.S. prediction market has accelerated growth recently amid the election cycle. Kalshi and Polymarket saw trading volumes surge after last year’s U.S. presidential election and recorded peak performances in October and November. Both platforms have shown similar trends this month as well.

The regulatory environment for prediction markets is also changing. The CFTC had maintained a conservative stance in the past and sanctioned Polymarket, but after losing a lawsuit with Kalshi it has left open the possibility of allowing expansion into various fields such as politics and sports. There is an assessment that a friendly tone has been strengthened under acting CFTC head Caroline Pham.

Gemini CEO Cameron Winklevoss said, "Prediction markets have the potential to grow as large as traditional financial markets," and added, "Acting head Pham is playing an important role as a regulator supporting innovation." He also said there were some concerns about conflicts of interest for certain prospective candidates.